Universal basic income would have a huge impact on the U.S. economy and the idea is gaining momentum and support recently from figures like Hilary Clinton, Mark Zuckerman, and Elon Musk.
What Is Universal Basic Income?
Universal basic income, or UBI, could be a solution to technological unemployment and could streamline government, giving citizens more autonomy over how they spend their money.
A basic income (also called basic income guarantee, Citizen's Income, unconditional basic income, universal basic income (UBI), or universal demogrant) is a form of social security in which all citizens or residents of a country receive a regular, unconditional sum of money, either from a government or some other public institution, independent of any other income Wikipedia
According to the Roosevelt Institute who conducted a study on the economic effects of implementing a UBI, in every scenario, there is an increase in output, employment, prices, and wages.
In the study they examine three versions of unconditional cash transfers:
- $1,000 a month to all adults
- $500 a month to all adults
- and a $250 a month child allowance.
For each of the three versions, they modeled the macroeconomic effects of these transfers using two different financing plans - increasing the federal debt or fully funding the increased spending with increased taxes on households.
The results were interesting.
For all three designs, enacting a UBI and paying for it by increasing the federal debt would grow the economy.
Under the smallest spending scenario, $250 per month for each child, GDP is 0.79%, larger than under the
baseline forecast after eight years.According to the Levy Model, the largest cash program - $1,000 for all adults annually - expands the economy by 12.56% over the baseline after eight years.
After eight years of enactment, the stimulative effects of the program dissipate and GDP growth returns to the baseline forecast, but the level of output remains permanently higher.
When paying for the policy by increasing taxes on households, the Levy model forecasts no effect on the
economy. In effect, it gives to households with one hand what it takes away with the other.However, when the model is adapted to include distributional effects, the economy grows, even in the tax-financed scenarios. This occurs because the distributional model incorporates the idea that an extra dollar in the hands of lower-income households leads to higher spending.
In other words, the households that pay more in taxes than they receive in cash assistance have a low propensity to consume, and those that receive more in assistance
than they pay in taxes have a high propensity to consume.
Thus, even when the policy is tax- rather than debt financed, there is an increase in output, employment, prices, and wages. credit
The question most people have when the idea of giving each citizen a guaranteed monthly income is,
How will we pay for it?
The U.S. has a population of 323,100,000 people and of those 125.9 million are adults which means to give every adult citizen a basic income of $1,000 each would cost $125.9 billion a month or $1,510,800,000,000 trillion per year. That is about 10% of the U.S. GDP.
The cost of funding a national UBI would amount to about 39% of the budget.
According to NationalPriorities.org These trillions of dollars make up about 21 percent of the U.S. economy (as measured by Gross Domestic Product, or GDP).
It's also about $12,000 for every woman, man, and child in the United States.
If we look at the costs of programs like:
- Medicare: $9,990 per person (2015)
- Food stamps: $124.91 per person (2017)
- Cost in services to the homeless: $35,000 per person (1999)
- Victim losses due to crimes against individuals and households: $1,800 per resident (1987–1990)
A universal income would dramatically offset these costs and all indications point to a more productive society.
Saving even a fraction of these costs alone could add up to well over the $1,000 per month given as a UBI to every adult in the country.
It seems to me that we are already paying for it in a sluggish economy, aid programs like food stamps and welfare, unemployment insurance, and a host of other economic crutches in our society.
Will It Make People Lazy?
Simply giving people some money would solve many of the concerns our economy faces while boosting the economy and consumer spending.
The same people that argue that a monthly allowance to citizens would lead to an epidemic of lazy people sucking the government tit, ignore the fact that those who are barely making enough to survive are more likely to turn to crime and drugs which cost the economy millions each year and does little to grow the economy.
Simply put, a junkie on the street with some cash in his pocket is better for a society than a broke one and far less likely to resort to crime. One way or another, we as a society are paying for it.
For our government to point the finger at someone on welfare and accuse them of living off of the government is the height of hypocrisy when compared to the military and corporate welfare state we find ourselves in.
For the majority of citizens though, studies show that they would remain productive even if they did get a monthly stipend. Some would argue they may even become more productive once their basic needs were met.
In some UBI trials done in Dauphin, Canada, and Oakland, California researchers found that households breadwinners as a whole reduced their workloads by about 13% and women reduced their workload only slightly more, devoting their time to caring for children or the elderly.
Teenagers spent more time pursuing an education rather than getting part-time jobs and there was a noticeable decline in the high school dropout rate.
Work, it seems, has more meaning than just a paycheck for most people and offers a means to contribute to society. For those who did choose not to work, they turned their attention to other meaningful endeavors.
Should We Do This?
Some of the most inventive people in our history were able to come up with novel and useful ideas in part because they did not have to earn their keep or be concerned with making ends meet.
Descartes, Darwin, Galileo, Adam Smith (to name a few) all did not have to work in the conventional sense to make a living. They were gentlemen of leisure but their contributions were not what one would call lazy.
Contrary to conventional wisdom, scientific studies have shown that when the concern of money for basic necessities is taken off the table, when people do not have to worry about money for food, health, and shelter, they become more productive, not less.
We have the strongest military in the world in part because as a nation we fund it. About 54% of the national budget currently goes to military spending. I'm not sure how many bombs it takes to blow up the world but I think we have enough to do it several times over.
We could afford to pay each adult $1,000 a month and reap the benefits of a stimulated economy, fewer costs for social services, homelessness, crime, and unemployment. All we have to do is fund it.
What do you think about universal basic income? Should we have it or not and why?
What's holding the government from just killing us all once we are no longer productive, don't pay taxes and become a burden to them? Communism has already killed more than 100 million people and keeps counting, it wouldn't be the first time in history.
This is a really, really bad idea. It would create an incentive for government to murder billions and they increasingly have the tools to do it easily.
More money in the system only means more paper, resources and services remain the same, inflation would just skyrocket and unproductive people would just continue on living their miserable lives. The government would have to keep inflating the currency to pay for these entitlements until the bubble bursts Zimbabwe style.
I'm from Cuba, I spent 25 years of my life and there and I have seen first hand what happens when government despises its own citizens and considers them second category, low scum, below tourists and foreigners. People's life is cheap in these regimes, they gunned down many thousands or let them die eaten by sharks when trying to escape. The regime orchestrated many schemes to get rid of its own people such as the Mariel boatlift and the 1994 rafters crisis.
If you want respect and the right to live, you have to earn it. I would say, get educated in tech, coding, or high demand blue collar jobs, get guns, land, and accumulate wealth and power. It's the only way to guarantee a future, all the other passive sheep will just be either enslaved or mowed down as usual in history as soon as they become worthless leaches...
I totally agree with you @cryptoeagle - you are 100% right and the rest of these fools just want "Daddy" to take care of them. We who know the truth will just have to live by natural law and let the stupid lemmings follow their govt over the cliff.
it's very difficult to understand for people born and spoiled in a prosperours democracy how things work in real life. Eventually they'll get it as the get older and wise up and realize it's a very bad idea to be reliant on government to solve your problems. Thanks for the support!
well I was born and raised here and I just use my brain. I pulled my head out of the sand 9/11 and started to read - no I am an anarchist and I know that human beings have been slaves for millennia and that "government" will kill it's citizens. It already is with chemtrails, GMO's, vaccines, HAARP, cops, and every other statist garbage solution... but fortunately the awake can live by Natural Law and get by ok, regardless if the sleepers keep sleeping.
This totally underestimate the massive technological unemployment that is upon us. Studies are predicting up to 50% of jobs gone in a decade or two. Whether you mistakenly think a UBI is socialism is irrelevant to the reality that capitalism needs a consumer class to remain viable. If we don't get money into the hands of consumers, then the whole thing falls down in a screaming heap. What we never hear from people like you is what is your solution to these problems? And appealing to some whacko theory that the government is just waiting around (til what, exactly??) to mow us all down is infantile.
Why am I "mistaken" when comparing UBI to socialism? It's pretty much the same idea of government handouts and paternalism that leads to communism, mass killings and societal collapse. Just take a look at the number of people killed by these paternalist governments that all started by promising they would protect and improve the lives of their people and ended up killing them en masse.
Government does not want or intend to kill us all. It's mostly composed of corrupt, inefficient officials and politicians that think they are right. They are human beings, with good intentions mostly.
The problem is, that eventually, as they go through "The Road to Serfdom" (a book you should read by the way if you want to understand this, it's difficult for people born and raised in wealthy capitalist countries since they are too spoiled by the easy life) when under pressure from economic collapse, they will always choose to sacrifice us. That's what has happened throughout history and will keep happening as long as the sheep remain ignorant, lazy and complacent. This is not a whacko theory, it's been proven many times over in history. UBI is the whacko theory here that has never been proven to work...
The solution to this is self improvement, I said it in my first comment. Get ready for the future, get an education on blockchain coding for instance, there's plenty of well paid jobs there. Of course, it requires effort and it's not for the lazy. There are many jobs that will be created that we can't think off right now. In fact, social networks that pay in crypto like Steemit could be one of those jobs.
UBI has worked essentially everywhere it has been trialled. And it's not socialism. It's embraced by economists across the full spectrum, including Hayek and Freidman (free market capitalists). And your faith-based position that jobs will just magically appear is contrary to both rigorous analysis and actual present trends. @scottsantens, who commented below, has written widely on this topic. He has extensive articles with exhaustive links and data that contradict all your points. Have a read of his stuff.
Where is that magic place where UBI worked? North Korea maybe? We have UBI in Cuba, it's about $20 dollars a month and people would rather swim with sharks than staying in that hellhole. You still don't answer the main issue: what would stop the government from just killing all the leeches and calling it a day?
What's stopping them from doing it now? Adding UBI into the mix doesn't change anything.
People with jobs, wealth, education and guns
Thanks for posting about basic income! Upvoted, followed, and resteemed.
FYI, I've been posting regularly about basic income here on Steemit under the hashtag #basicincome. If you write another post about UBI in the future, I think more people will find it if you use that hashtag. Cheers!
I think the BUI will remain an illusive socialist utopia because it will inherently devalue any money distributed by it. As soon as income is not conditional on effort and intrepid any more the majority is likely to lose any material appreciation.
This would -by design- just introduce a tremendous source of inflation, thereby necessitating even more state intervention to control the artificial system that is BUI
So I have to admit that I am not as optimistic about BUI as you guys
It sounds like inflation is your main concern about UBI. Please read this article in full to go into that concern in depth.
https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7
How would it cause inflation?
Isn't that caused by printing money?
This would just be redirecting money that already exists.
We government "gives" money to so many programs and corporations already without them having to do much "work" to receive it.
How would giving it directly to people be any different?
Well, I think a sense of general entitlement would incentivize a more "careless" spending behaviour and money management. This in turn creates inflation of consumer prices which would require the state to adapt basic income levels and so forth and lead to a vicious cycle of money devaluation.
I'm not understanding how increased spending behavior would create inflation of consumer prices.
It's essentially impossible to imagine that spending behaviour and money management could be any worse than it is now. Personal (and national) debt is at record highs. But the reality of capitalism is that you need that sort of carefree spending to prop the whole system up.
Absolutely right @luzcypher. And even then, printing money doesn't necessarily lead to inflation.
Universal Basic Income is just one of those ideas that are great, but the general public isn't really ready for it , I think. So let's just keep an eye on all those Basic Income experiments that are currently running in Kenya, Finland, California, the Netherlands, Canada and India, just to name a few places where various forms of BI will be tried, tested and evaluated.
Personally, I think HBI is the only possible outcome when robots will take over most of our jobs.
Those studies you mentioned are very interesting and I've been following them.
Great post @luzcypher. As a note, Finland is doing a larger scale "trial" on UBI. Can't remember if it started or will start soon.
As you write, most people against UBI sais people will be lazy and they will just go for the freebies. But UBI is just the same thing we do today, with food coupons or medicare or whatever type of welfare system the country has for the poor.
The UBI is just the "base" for everyone, and will give everyone the opportunity to spring board of from where they may be because of where they where born. A person growing up in a poor family will not have the same opportunity in life as a person growing up in the middle class. Sure, there are people that have luck on their side, but the majority will be neglected no mater how hard they try in life and will end up on the poor side of society.
Just adding up the subsidies will make UBI a good thing, but add the cost of crime and other poor people shit and it will pay itself of over and over. Sure, it's not a way to eliminate crime, but a guy with money in his pockets or food for the day will not rob someone for money.
At the same time, the money spent is money going back to the welfare system trough taxes, they will benefit companies (which pay taxes) and give more people work and less dependent on UBI.
Can't see the downside of UBI, honestly :)
I can't see the downside either. We are already spending the money, this is just more direct.
As far as people getting lazy, there is no evidence to support that and plenty of evidence that disproves it. Most would use it as a springboard to a better future.
My view is that those who say people would just laze around doing nothing and have no ambition are actually telling us more about themselves than others.
@luzcypher, you're ignoring one thing. A UBI requires blind faith in the religion of Statism. We cannot continue to give mere mortals in Government the superhuman power to conjure up money out of thin air with no accountability!!! ""THEY"" will use this increased power to enforce their (Human) will upon the teeming masses. These leeches on society's blood flow, will ALWAYS find a way to take more and more from their worshipers. We already live in a society (In the US at the very least,) where Government thugs outright steal at gun point, more from citizens than all Burglars and Muggers combined!!! An already bankrupt Government cannot afford to simply hand out cash to the unwashed masses. This will then by necessity require these fiat hand outs to be tightly controlled. "You've exceeded your monthly allotment of condoms, tampons, or soft drink purchases for the month!!!" "Please come back next month." This will ALL be controlled by ensuring that ALL transactions are in digital, and centrally controlled form. Your UBI will be an "EBT" card for your entire life!!! Speak out online against ANYTHING the lord and masters don't want exposed, and your "Card" gets electronically deleted!!! You simply cease to exist! In the mean time, the brainwashed masses will be so enthralled at not having to indenture themselves in servitude that they'll be oblivious to how their demi-Gods are using force to invade and rape other sovereign Nations. Those in power will have free reign to use force to create profit for themselves!!!
Mwahahaha (in an evil laugh) Bad Dog No! UBehave or no UBI. Mwahahaha!
Good points. I chose to ignore that for this post but I admit to feeling unnerved at that the thought of even interacting with my government let alone giving them so much power over people.
I'de put more trust in sewer rats.
@luzcypher We won't have to ""GIVE"" them the power, or have the choice not to "Interact".... They're going to TAKE it!!!! I really believe all Western Nations will soon be forcing their populations to go "Cashless". The Central banks are a ""One Trick Pony" and they've played their cards already. The only thing they have left to keep the economies from caving completely (And their owners, the big banks,) is to play the negative rate card. This means all the fiat currencies will be forced into the banks, so people can be charged a fee for the PRIVILEGE of having any money!!! I think there will be a great war on crypto currencies that's only now just starting.
"Cryptos" give people an option! Block chain makes the banks "Inconsequential". It makes them useless Intermediaries. Crypto currencies will make the necessity of having to put every hard earned penny into the banking system, and have - it, your transactions, and life controlled by Big Brother avoidable. There will be stories of govt Goons using force at gun point, and assaulting people to force them into the banking system. This will be so that even more can be extracted from them. I for one, plan on "Going long on Steem"!!!
Paying for UBI by increasing the inflation rate does not work out well.
Sure, the German Weimar Republic continued to pay all the retirement checks, but they didn't even pay for bread near the end.
If we actually cared about food, shelter and clothes for everyone, we should provide just those things. It is far more cost effective to build a tiny house for every person in america, then to pay for section 8 housing today. But, we never hear of that. All we hear of, is printing more money to pay everyone.
Further, this UBI is being pushed by the same people that want everyone on digital currency. It is a trap. They would love everyone to be reliant on govern-cement money coming in every month. And, if they don't like you for some reason, they just turn off your chip/card/phone. Don't tell me that wouldn't happen; just look at the problems in social security.
And finally, that piece of crap that all who write on this keeps trotting out.
The rich CEOs make so much money. Its us vs them. They are making money off of all the little people. Well, they might be, but the CEO of Wallymart makes about 12¢ per employee per year.
Further, where the rich are really making the money is charging you money (taxes, interest and inflation) on every single dollar in existence. These people are raking in the money and controlling the govern-cement. Only through the govern-cement created monopolies could they steal so much from all of us little people.
And now, you would like to give these very people more money and power?
UBI is absolutely a great idea. Being up on the technology front, this debate goes hand in hand with the impending technological unemployment. Now many want to dispute that this is happening/is going to happen yet we see the signs on a daily basis. Corporations have always looked to increase profitability by decreasing the size of the workforce...now, with AI, robitics and other automation, they are getting it.
I am involved with an organization that is going is offering, that I know of, the first worldwide UBI, open to everyone. I should have details towards the end of the month/beginning of next month.
Thanks for the post.
Look at GrantCoin. Link at the very bottom of my post.
Already involved...it is becoming manna coin....
Met with Eric and Brandon about a month ago in fact. Unfortunately, all is on hold for the moment while some new things are implemented.
I chatted with Eric. He seems really cool.
I think it is a great idea, and a really important solution in the near future as unemployement rates could increase. The only needed thing is to fund it properly.
I will also have its detractors, of course. But which new idea doesn't have them? People isn't good at managining changes.
I think we should try it too.
I think that something like UBI will have to be done at some point. Technology is erasing jobs at an increasing rate, and those jobs aren't coming back. At some point, a lot of people will be homeless and starving without it.
Thank you for covering this topic as it is something I had only heard in passing prior to this and never had much of a reason to look into it more. From what you laid out initially a few questions popped into my head, all of which were answered in the following paragraphs.
I normally try to voice my own opinion on things like this after reading an article but, I feel it may be unfair. This was a ton of info and I feel like to properly give an opinion, I need more time to digest all the info you offered up. Nothing better, for me, than getting my brain going though. Thanks again!
There is so much more info on the topic you could dive into. It is a lot to digest.
What if Universal Basic Income was set at 240.85 per person per year - roughly $20 per month. This is also roughly the amount of military expenditure per year
Source: Wikipedia
What does this mean - in many countries it means a pizza per month - while in other countries it represents some peoples annual income. Universal Basic Income means better health and better education as a byproduct.
The hardest thing to understand in the world is the income tax.
- Albert Einstein
if they can fund it voluntarily 👍
Great post thanks for the info
I really like Buckminster Fuller's words , he exactly understand youth of today , youth will be more productive , if they don't think about money and house and food and these stuffs ... , but its even hard to go to doctor for teeth because the price is high and also for any other cures , I wish there will also be a solution for health cares of people ...
Universal basic income would solve a lot of problems for chronically unemployed people, especially those who lost their homes during the market crash that only the wealthy people have recovered from. I also agree that it would boost the economy. The economy is based in large part on consumer spending, and when people have nothing left to spend after paying for necessities, the economy can't grow.
More dependence on bigger government can only lead to more slavery. No thank you.